Frequently Asked Question’s for Hard Money Loans
How fast can you close?
We can close our loans in 7-14 days.
What is your maximum loan to value (LTV)?
We can lend up to 80% of the purchase price and repairs (for qualified investors and properties), loan must be less then 65% of the after repaired value.
What is the minimum credit score you will accept?
Our minimum credit score is 600. Credit score and financial strength will factor into the maximum Loan to Value, down payment, points, and interest rate. We will lend under 600 FICO with a lower loan-to value.
What are your loan origination fees? Interest rates?
Loan origination fees equal 3-6% of the loan amount (minimum $3,000) and interest rate’s range from 12% to 19%
What types of properties will you lend on?
We currently only lend on non owner occupied single family houses 2,3,4 units, condos and townhomes, commercial properties and multi unit property. We can broker any loans we do not fund ourselves.
Our ideal residential property has 3+ bedrooms, 2+ bathrooms, and is located in a well maintained neighborhood. We generally won’t consider small houses (i.e. less than 1,000 sf), houses with 1 bathroom (unless the rehab includes adding a 2nd bathroom, houses located on busy streets, houses abutting industrial/commercial areas.
In what areas do we lend?
We currently lend both residential and commercial investment property transactions. Our focus is residential investment and commercial properties throughout the Greater New York City and New Jersey. We also lend in California, Texas, Illinois and Florida.
What is your minimum loan amount?
Our minimum loan amount is usually $50,000.00. We occasionally fund smaller loans, however our minimum loan origination fee is $3,000.00 or 5 points, whichever is greater.
Is an appraisal required? Will we accept a third party appraisal?
An appraisal is performed by us. We do not accept third party appraisals. We determine the after repaired value (ARV) of the subject property using a competitive market analysis or comparative market analysis (CMA). The CMA will use sold listings from the MLS to determine the estimated after repaired value (ARV). The comps used in the CMA will be from similar properties in terms of size, age, condition, construction, etc. within a radius of 0.3 miles from the subject property that have sold within the previous 3 months.
Do you charge prepayment penalties?
Yes we have a minimum pre-payment of four months interest. Your loan may be paid at any time with a prepayment penalty. The faster you rehab a property and sell or refinance it, the more profit you make.
Do you lend money for repairs?
Yes we lend money for repairs provided the total loan amount does not exceed 65% of the after repaired value (ARV) of the property. Repair money will be held in escrow and will be released in draws as you complete the renovations on your property. We will not provide any draw advances. The borrower is responsible for paying their contractors and material men.
Do you provide proof of funds letters?
Sometimes, provided you have been pre-approved.
Can anyone live in the house during the course of the loan?
No, we only lend on non-owner occupied properties.
Do I need to have a property under contract before applying for a loan?
We can pre-approve you for our loan program prior to placing a property under contract.
Do you require a down payment?
Yes, depending upon the buyer’s credit and financial strength, we can finance 80% of the purchase price and 80% of the repairs up to 65% of the after repaired value (ARV) of the property.
Can the points, closing costs, and interest be rolled into the loan?
Maybe, we prefer the borrower pay their own points and closing costs (i.e. seller paid closing costs are not permitted). Interest payments are made monthly beginning on the 1st day of each month.
Are there any upfront fees? Application fees? Inspection fees?
We do not require any upfront fees, application fees. Once we have approved your loan, we will instruct our attorney to order a title search on the property and prepare closing documents. The borrower will be required to pay for the document preparation in advance to our attorney.
Can we close with my attorney or do you require we close with your attorney?
All loans will be closed with our attorneys. The only exception will be when the seller is a bank and the bank requires that the closing be held at their attorney’s office. In this case, the loan will be closed with our attorney prior the closing with the bank’s attorney.
